Unemployment rate drops to 7.8 despite weak hiring

The unemployment rate fell to 7.8 percent Friday, dropping below 8 percent for the first time in nearly four years, according to the Bureau of Labor Statistics. The economy added 114,000 jobs.

The number of workers involuntarily working part-time due to economic reasons rose in September to 8.6 million, from 8 million in August.

“These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job,” the BLS wrote in a release.

“Economists were expecting 113,000 more jobs and the rate to rise to 8.2 percent. Last month saw 142,000 new jobs as the rate dropped from 8.3 percent in July,” CNBC reported.

But the drop in the unemployment rate belies the number of people who are underemployed or have stopped looking for work.

“The U-6 unemployment number, which accounts for the underemployed and those who have given up looking for jobs, held steady at 14.7 percent,” CNBC noted.

While President Obama may have found himself floundering after his weak debate performance, the drop in unemployment rate may provide a boost to his campaign.

“While there is more work that remains to be done, today’s employment report provides further evidence that the U.S. economy is continuing to heal from the wounds inflicted by the worst downturn since the Great Depression,” Alan Krueger, chairman of the president’s Council of Economic Advisers, said in a statement Friday. “It is critical that we continue the policies that are building an economy that works for the middle class as we dig our way out of the deep hole that was caused by the severe recession that began in December 2007.”

Following the August jobs report, CNBC contributor Rick Santelli predicted the unemployment rate would drop in favor to help the president’s reelection bid.

“I want to make a prediction for the Friday before the election number right now,” Santelli said. “7.9 on unemployment rate.”

Presidential candidate Mitt Romney released a statement Friday about the jobs report.

“We created fewer jobs in September than in August, and fewer jobs in August than in July, and we’ve lost over 600,000 manufacturing jobs since President Obama took office,” the statement said. “If not for all the people who have simply dropped out of the labor force, the real unemployment rate would be closer to 11 percent.”

“This is not what a real recovery looks like,” the statement added, noting “23 million Americans struggling for work, nearly one in six living in poverty and 47 million people dependent on food stamps to feed themselves and their families.”

Hiring has been slower in 2012 adding an average of 146,000 jobs a month, compared to 153,000 in 2011, on pace to create fewer jobs this year than last. Economists estimate that hiring will need to be roughly two to three times that number to make a full recovery.

According to the pro-growth Hamilton Project, at the going hiring rate, it will take until after 2025 to return to regular employment.

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